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WHEREAS, in or about October 2021, Frontier Precision performed a floor inspection
<br />survey in the WTP No. 2 filter cells, which showed that the underdrain nozzles installed at varying
<br />elevation in cells 1 and 3 (the "Underdrain Issue");
<br />WHEREAS, in or about 2022, Mounds View retained Barr Engineering Co. (`Barr") to
<br />conduct testing on the WTP filters to measure media loss in same;
<br />WHEREAS, on May 19, 2022, Shank served Mounds View with a Summons and
<br />Complaint (the "Action"), which asserted Causes of Action against Mounds View for Breach of
<br />Contract, Breach of Implied Warranties, and Unjust Enrichment regarding the Project. In the
<br />Action, Shank alleged that AE2S Inc.'s Specifications were deficient, which purportedly caused
<br />damage to the WTP that Shank was required to repair. Shank contended that it was owed a sum
<br />from the Construction Contract and additional Work performed due to AE2S INC'S alleged errors
<br />and/or omissions;
<br />WHEREAS, effective June 27, 2022, AE2S LLC and Mounds View signed a Tolling and
<br />Mutual Cooperation Agreement to pause the running of the applicable Statute of Limitations with
<br />respect to Mounds View's potential claims against AE2S INC. and/or AE2S LLC (the "AE2S
<br />Tolling Agreement");
<br />WHEREAS, Barr performed testing in 2022 and 2023; and, on April 14, 2023, Barr issued
<br />a Water Treatment Plans 2 and 3 Filter Evaluation to Mounds View in which Barr opined: (1) on
<br />the root cause of the Media Issue, (2) that air was entering the underdrain during backwash, which
<br />was disrupting the gravel, (3) on the insufficient drain down of cells prior to the air and water
<br />backwash, and (4) the improper installation of the underdrain laterals, which were canted to one
<br />side (the "Barr Report");
<br />WHEREAS, on April 14, 2023, Shank filed the Action with the District Court, Second
<br />Judicial District, Ramsey County, Minnesota. Neither Shank nor Mounds View named AE2S
<br />INC. and/or AE2S LLC as a party to the Action;
<br />WHEREAS, the Parties have engaged in settlement negotiations in an attempt to resolve
<br />their respective claims against each other without the need for further legal action and expense; and
<br />WHEREAS, the Parties have determined that it is in their best interest to avoid further costs
<br />and delays in resolving the claims, disputes, causes of action, and potential causes of action
<br />between them involving the Media Issues, Underdrain Issues and the Action and in the AE2S
<br />Tolling Agreement (collectively, the "Released Claims," as defined in the Settlement Agreement).
<br />As such, AE2S LLC and Mounds View now desire to, and have agreed to, compromise and fully and
<br />completely settle and resolve any and all of the claims, disputes, causes of action, and potential
<br />causes of action by, between and/or among them including, but not limited to, any and all claims
<br />that either Party asserted, could have asserted, or should have asserted against the other Party
<br />relating to, regarding and/or arising out of the Released Claims; and, wish to memorialize the
<br />terms and conditions in this Agreement.
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<br />BE295\365\894969.v2
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